Despite relief brought from a bull market that’s colored much of 2023, uncertainty-- fueled by persistent inflation, a spike in interest rates, and soaring geopolitical risks--is an even more dominant theme than it was when this survey originally went to press in June. Manager caution, which held back fund performance during the first half of the year, is beginning to be rewarded.

In 2022, the world’s most consistent managers staved off losses by having successfully navigated a whole host of hazards. On average they delivered modest gains. But compared to the market, they hit a home run. Since then things have inverted. A flat first-half performance of this year’s Top 50 funds suggests managers, most of whom made last year’s list, remained cautious, having expected more fallout. But instead of declining further, the S&P 500’s 17% gain was its best first half in this century, and the Nasdaq’s first-half return of 32% was its best in 40 years. Remarkable, considering the Fed is continuing its monetary tightening, earnings are slowing, and the war in Ukraine is intensifying. This rally caught the most consistent managers flatfooted.

For a copy of the update and the main 2023 Survey, please send a request to Uhlfelder@hotmail.com

This is the 20th anniversary edition of my global hedge fund survey. During this time, we’ve seen seismic events affecting economies, markets, and politics. And while 2023 isn’t colored by the outbreak of a pandemic, a new war, or national elections, many investors are still weighed down by uncertainty about what rising interest rates, recession, and war could bring—in spite of the first half market rally.

Last year’s performance of the Top 50 funds proved their value, having outperformed the S&P 500 by nearly 24 percentage points. More than two thirds from that select list qualified for this year’s group, affirming their consistent performance; and 44 of this year’s funds made money in 2022. This helped the Top 50 collectively outpace the market over the trailing five years through 2022 by more than three full percentage points. They did so with considerably less risk than the S&P 500 and a market correlation of just 0.18. And the Top 50 has sustained this strong performance for more than a decade.

This year’s survey includes commentary and outlooks from leading global allocators, economists, four exceptional fund managers. and former US ambassador to Russia Michael McFaul. He shared his thoughts on what it would mean to lose Ukraine and why that can’t happen.

28 February 2023 BarclayHedge

Bucking virtually all market trends, Global Investment Report’s Top 50 hedge funds gained more than 5 percent last year. With fund selection based on the most consistent historical performance through 2021, more than two thirds of the group delivered positive returns in 2022. Leading the way were global macro, multistrategy, and volatility arbitrage funds. This year-end report includes full-year 2022 returns of each fund in the Top 50, analysis and interviews of leading fund managers, and insights from major hedge fund allocators about what to expect.

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20 November 2022 BarclayHedge.com

Spiking volatility fueled by rising interest rates, high energy costs, and sustained inflation sent the market plummeting by nearly 24% through the first three quarters of the year. Russia's increased shelling of critical Ukrainian infrastructure as winter sets in is turning the war even more horrific. This is ratcheting up geopolitical tensions and global economic uncertainty as Europe appears headed for recession that's likely to jump the Atlantic and hit the US in 2023. And growing liquidity concerns threaten to turn this troublesome brew toxic. All this makes the Top 50 hedge funds’ performance even more noteworthy. The group was up nearly 4.5% year-to-date through September, outpacing the market by 28 percentage points. Outperformance continues to be driven by multistrategy, volatility arbitrage, and global macro funds.

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26 August 2022, Global Investment Report and BarclayHedge

The 2022 Top 50 hedge funds--based on the best performing broad strategy funds over the past 5 years through 2021--outpaced the market during the first half of 2022 by 21 percentage points. The 50 were propelled by strong returns of multistrategy, global macro, and volatility funds that made the list. The review also includes a critical look at the current macro environment and forward-looking thoughts offered by various industry leaders.

22 June 2022, BarclayHedge

Like the 2020 edition, this year’s survey collides with a seismic event — a geopolitical shock wrapped around soaring inflation, rising interest rates, and weakened supply chains. Several key takeaways: Over the past five years through 2021, the Top 50 hedge funds collectively generated net annualized returns that trailed a red-hot S&P 500 by just several percentage points, but did so with significantly less risk. The group’s largely uncorrelated returns produced a 5-year Sharpe Ratio that was more than 60 bps higher than the market. And as was shown in the 2020 survey, the current Top 50 funds have again preserved capital better than the S&P 500 during the first quarter drawdown. This year’s survey includes interviews with Citadel, Amundi, Generali, EFG International, NS Partners, along with six hedge fund managers who made this year’s Top 50.

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8 May 2022 RIAIntel/Institutional Investor

From nearby Copenhagen, the veteran Danish economist with decades of experience in central and eastern Europe deconstructs the continent’s worst conflict since World War II and the implications for economies and markets.

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Extraordinary macroeconomic and geopolitical events are reviving attention to the world's largest asset class.

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